The Spanish midfielder has reportedly been scouted by the Blues in recent months and negotiations have now begun between the two clubs.

A summer deal is expected - but Koke is set to cost up to £46m.

Jose Mourinho could even offer Atletico former defender Filipe Luis to sweeten the deal.

Lukas Podolski is set to return to Arsenal in the summer - despite being sent on loan to Inter Milan for the second half of this season.

"When I go back (to Arsenal) I think I have the chance to play there," he told the Daily Mail.

"I have one year left so well will see what happens. I feel very well at the club and with my teammates as well. I had a great two and a half years; I scored a lot of goals there and had a lot of assists.

"The first six months of the season were not easy, that’s why I changed clubs. But now I’m ready."